How He Became The World's Richest Man

how does a boy born into poverty become the richest man in the world Andrew Carnegie is the personification of the American dream an extraordinary rise from the very bottom to the absolute top however I must warn you there are two different sides to Andrew Carnegie on the one hand he was a hypocrite he preached about workers rights publicly and yet privately he slashed his workers wages significantly increased their working hours and essentially exploited his staff as slave labor in barbaric dangerous conditions to build his fortune he destroyed unions and his actions resulted in countless unnecessary brutal deaths and yet on the other hand Andrew Carnegie may be the greatest ever philanthropist after becoming the richest man in the world he then spent the rest of his life giving almost all of that money away he funded universities schools and nearly 3 000 free public libraries around the world to help others improve their own position in life he's also responsible for incredible Innovation that helped build America and change the way we do business Carnegie's story is both inspiring and shocking and involves several other business Titans for example Carnegie was bitter Rivals with Rockefeller and also ended up making the biggest business deal in history with JP Morgan but before all that wealth and drama we need to travel back to 1835 where a young boy is Born Into abject poverty thank you Andrew Carnegie was born in Scotland which is the reason I'm saying Carnegie instead of Carnegie because this is how the Scots actually pronounce it but Andrew's starting life was depressing to say the least his first home consisted of just one main room inside a small cottage which the Carnegie shared with another family Andrew's father was a loom Weaver making cloth by hand and Andrew had expected he would do the same thing when he was older but then Along Came the Industrial Revolution and steam-powered looms which put hand Weavers like Andrew's father out of business suddenly the little income the family had was gone in order for the family to have enough money to survive Andrew's mother stepped up and began working extremely long hours repairing shoes for people in the nearby area meanwhile Andrew witnessed his father begging for work a haunting image that would stick with him for the rest of his life but it was soon clear that there was no real prospects left for the family in Scotland and Andrew's mother had heard stories from her Sisters in America that the US was the land of opportunity Unity so in 1848 the family sold all of their possessions and used the money to embark on a one-way trip to America in search of a better life [Music] the family arrived in Pittsburgh Pennsylvania which was a hub for manufacturing but both of Andrew's parents struggled to find consistent work so Andrew dropped out of school after just five years of education as he knew the family needed him to find work and provide another source of income to support themselves at the age of 12 Andrew's father found him work in a cotton mill working 12 hours a day and making 1.20 per week Andrew would later reflect that no amount of money ever made him happier than that first paycheck he felt proud to be helping his family out in some way and better yet Andrew was soon promoted to be Engineers assistants where he stoked the boilers in the textile Factory it was slightly better pay but the job literally gave him nightmares he'd wake up sweating that there'd been an accident at the factory and he'd been engulfed in flames so by the time he was 14 Andrew had found himself another job this time working as a messenger boy at a local Telegraph office his job consisted of him biking all over the Pittsburgh area to deliver telegrams not only did this job pay more 2.50 per week but it gave him the chance to meet influential people within the city's business Community as he delivered them telegrams Andrew learned who the most important and influential people in the area were and made sure to memorize their names and faces so that if he ever saw them in the street he could say hello and this strategy worked Andrew soon caught the attention of a man named Thomas Scott a regional manager for the Pennsylvania Railroad Company a huge business and the largest Railroad in the country Tom took a liking to Andrew and hired him to be his personal telegrapher and private secretary Andrews wages jumped up to 35 dollars per month but even more importantly this was a massive opportunity to see firsthand how a major corporation was run Andrew immediately showed great potential and thus Tom Scott decided to essentially Mentor him it's believed Tom saw something of himself in Andrew they'd both started out very poor but had huge amounts of ambition and work ethic but for Andrew this connection would prove to be invaluable as Tom Scott would later become president of the entire company and since Andrew was Tom's protege Andrew Advanced up the company's ranks quickly as well he worked closely with Tom to oversee the railroad expansion there's no doubt this mentorship played a pivotal role in Andrew's future and helped him understand the ins and outs of running a profitable business the two had a close Bond and Tom fondly referred to Andrew as my boy Andy however whilst things were looking up for Andrew's future they weren't for his father after seven years in America Andrew's father died age 51 a broken man and a victim of the Industrial Revolution one day Andrew came home from work to see his mother crying and he vowed to her then and there he would become rich and take care of her whilst Andrew said this with conviction there's no way either of them could have possibly guessed just how crazy things were about to get laughs [Music] Andrew worked closely with Tom as they developed bigger cars and longer trains meaning they could cover bigger loads and cut costs their railroad was also the first to keep trains moving 24 hours a day Not only was Andrew learning a lot about business but also about money one day Tom approached Andrew and told him to buy shares of a stock called Adam's express it very quickly showed up in value and it was the first time Andrew had made money so easily without doing any actual work now this was blatant insider trading of course but Tom instilled in Andrew the idea of your money working for you rather than you doing manual labor for money like Andrew had been used to as Andrew continued to rise through the ranks at the railroad company aided by his mentor he was becoming increasingly well off which meant that when the American Civil War came around in 1861 Andrew paid a substitute to take his place on the battlefield rather than fighting himself by 1865 when he was 30 years old Andrew was making more than fifty thousand dollars a year however Andrew was always looking for for that next big opportunity and so at this point he decided it was time to leave the Pennsylvania Railroad and head to New York City with his mother where they got a suite at one of New York's most fashionable hotels finally he could give his mother a true Taste of luxury once he got to New York he began managing a business called the Keystone Bridge Company that's because whilst working for the railroad Andrew had foreseen the need for iron Bridges to replace wooden bridges and so he capitalized on the opportunity however the Keystone Bridge Company didn't just build Bridges Andrew made sure to apply the lessons he'd learned from his mentor and vertically into great production meaning they had their own Iron Mills to produce the iron for Bridges rather than relying on iron Mining and extraction companies like their competitors this gave Andrew more control and the ability to cut costs so he could offer better prices and dominate the market not just that but Andrew had something most of his competitors didn't Connections in the railroad industry he was able to sell a lot of bridges to rail companies looking to expand their routes thanks to the contacts Andrew had previously made and and one day Andrew was approached with an intriguing proposition building the largest Rail and road bridge in America at the time over a mile long that would span the Mississippi River and connect east to west like never before this would be a game changer for the railroads but it quickly became clear why nobody had done this before a normal Bridge would not withstand the Mississippi current they would need a stronger Building Material like steel but at the time it was extremely expensive and difficult to make in large quantities that's why still was used for small items like Cutlery and jewelry but certainly not for a huge structure like the bridge Andrew was planning but Andrew felt convinced that steel was the future if they could find a way to make steel cheaper it could revolutionize not just Bridges but all kinds of different buildings Andrew became fixated on the idea he looked out across the Mississippi River and could Envision his creation he knew big rewards required risk and so he threw himself fully into the project and began seeking a way to produce large quantities of Steel he traveled all around the country to different steel mills and chemists to try and learn everything he could for a while though it seemed like a lost cause until someone finally introduced him to an English inventor called Henry Bessemer Bessemer had created a new way of refining steel from molten pig iron that was much more efficient and cost effective the Bessemer converter which was a pear-shipped furnace allowed for the mass production of Steel on a scale never seen before it caught the time to manufacture a single steel rail from two weeks to 15 minutes something that was previously believed to be impossible and it was exactly what Andrew near did it would still be expensive to set everything up of course but Andrew saw the potential and invested almost everything he had in this new technology from Bessemer and began to adapt it to his needs he was willing to invest heavily in building a gigantic steel production plant something very few other entrepreneurs were willing to take a gamble on but Andrew just had pure belief in the idea and went all in once he'd also got some additional investors to help him Finance it Andrew wasted no time in setting up his first DML using these Bessemer converters that could produce large volumes of Steel and after years of grueling work the bridge over the Mississippi River was successfully built the first ever steel structure of this size it was a huge accomplishment but there was one big problem nobody believed a bridge that big across a river was safe back then Bridges collapsing was not uncommon and people weren't used to seeing Bridges this size so Andrew had to prove it was safe now at the time a popular Superstition was that elephants would not walk across foundations that were unstable so Andrew had an idea on the opening day of the bridge where the public gathered to see what would happen Andrew arranged for a circus elephant to lead a parade across the bridge when it crossed successfully people followed behind feeling reassured and the bridge was officially open for business the eids bridge as it's now called is still there today built with Carnegie steel but for Andrew he was no longer just thinking about bridges with his new steel mill able to create Steel in such large volumes it was time to start thinking much bigger thank you thanks to Andrew Steele Mill and the Bessemer process it was now possible to create large structures from steel and initially Andrew's biggest customer was the railroads since they were eager to replace both their Bridges and Rail lines with steel now that it was affordable as it was a stronger and more reliable material knowing that the railroads would be such a big customer Andrew made a very unusual but strategic decision about the name of his first steel mill rather than naming it after himself he instead called it the Edgar Thompson still works named after the president of the Pennsylvania Railroad Andrew hoped naming it after one of the most influential men in the entire railroad business would show his public appreciation for the rail industry and help bring in more customers and he was right almost immediately Edgar Thompson himself ordered 2 000 steel rails from Andrew Steele Company however part of the reason Andrew was able to produce steel at a more affordable price was that his still planned was ruthlessly efficient from his poor upbringings he'd learned the value of tracking every penny and this frugality stayed with him as he ran his steel business his motto was watch the costs and the profits take care of themselves unfortunately one of the key ways to save money was cutting labor costs and extracting the maximum value from every worker thus Andrew had his employees working 12 hours a day seven days a week he gave his men just one holiday per year the Fourth of July every other day it was grueling work countless workers suffered devastating injuries from the job and deaths were a common Occurrence at Carnegie Mills since workers weren't provided much protective equipment or safety measures as cutting costs was always the priority employees were pushed to their absolute maximum both mentally and physically and Andrew tried to inspire competition between workers by pitting them against each other whilst this did help them produce record amounts of Steel this then became the new standard quota that they were expected to hit every week if they didn't they were fired needless to say employee turnover was high as the job broke many of the staff that worked for Andrew though as he deliberately made sure the production used unskilled laborers doing repetitive tasks so that the labor was easily replaceable as a result the workers couldn't take any Pride or craftsmanship in their work and felt dehumanized of course some context is important in the 1800s it's not like Andrew Carnegie was the only one to try and push workers to their limits for low wages but Andrew definitely prioritized efficiency in cost cutting Above All Else and whilst it was brutal for the employees it certainly was effective Andrew's Relentless drive for efficiency meant his Mills were some of the most productive in the entire world soon his Mill was capable of rolling out 225 tons of steel a day Andrew Carnegie had found a way to mass-produce cheap steel and was fueling the growth of a Nation giving the country all the steel it needed and making himself a fortune and even though Andrew was strict about the costs this doesn't mean he wasn't willing to spend big in the short term if it meant improved efficiency for example as technology advanced he was always looking for machines to replace the jobs of people since machines didn't need sleep he would be willing to immediately get rid of an entire process or plant or Department if there was a more efficient way to do things and he became known for making quick and ruthless decisions one example of an innovation Andrew used was to install new systems that improved Material Handling including overhead cranes and hoists which sped up the still making process and therefore boosted the production capacity of his Mills and just like he'd done in the past vertical integration was always Andrew's goal ensuring he controlled all the companies in the supply chain so for example he wanted to own the supply of raw materials all the way through to making the steel and then even transporting the finished goods to customers by controlling all stages of production he cut costs even further interestingly though at age 33 Andrew wrote himself a letter vowing to only work for two more years and then devote the rest of his life to benevolent purposes he wrote simply making more money must degrade me Beyond hope of permanent recovery however I'm sorry to say that two years later Andrew would not only still be working but he'd be surrounded by more controversy than ever before after a very successful start in the steel business disaster suddenly struck for Andrew Carnegie his biggest customer the railroad business began to face some major problems they had been building railroads so rapidly that there were too many railroad lines competing with each other and after the stock market crashed an economic activity slowed suddenly the railroads didn't have enough business to sustain them the country was facing a brutal depression around this time and for Andrew Carnegie the major problems the railroads were having meant orders from the railroad industry suddenly dried up as they no longer had the money to buy his steel this put Andrew in a perilous position himself as his business model only worked if selling large quantities of Steel however one man saw all of this as an opportunity he could exploit oil magnate John D Rockefeller knowing how desperate the railroads were for more cargo Rockefeller negotiated a huge discount with them to ship very large quantities of his oil on the railroads at a much lower price desperate for money they agreed at first but the discount was so high that it became unsustainable they realized they couldn't survive on the prices Rockefeller was paying so they tried to renegotiate and find a middle ground but Rockefeller said no and instead pulled his oil off the trains completely since he was one of the railroad's biggest customers this made the situation go from bad to worse and many rail companies went bankrupt one of those most in trouble was Andrew's old Mentor Tom Scott who'd invested in multiple railroads that were now struggling badly and so Tom approached his old Protege Andrew Carnegie and this time instead of giving help he was asking for help he knew Andrew had gone on to become wealthy through the still business and he asked Andrew to invest in his struggling rail company so he wouldn't go out of business you would think Andrew would be very keen to repay his old Mentor who had done so much for him but Andrew turned him down saying he couldn't help because all of his money was tied up in manufacturing Tom left devastated and his business never recovered he died not long after the man who had once meant more to Andrew Carnegie than anyone else in the world was now gone as he stood at Tom Scott's grave in 1881 rain pouring down Andrew believed one person was responsible for the death of his mentor Rockefeller maybe it was just Andrew's way of not accepting any responsibility himself but Andrew became convinced Rockefeller drove Tom Scott to his grave and Andrew wanted Revenge a rivalry was born the king of oil versus the king of Steel whilst this rivalry was mostly bitter there was a slightly more humorous side too as the two men would send each other passive aggressive Christmas gifts one year Rockefeller sent Andrew a cheap paper vest to rub it in that he came from poverty as a poor immigrants in return Andrew sent Rockefeller a bottle of fine whiskey knowing that he completely abstained from alcohol and was a devout Baptist which meant he couldn't even give the alcohol away but in many ways having a rival spurred both men on to be even more ambitious to try and beat the other Andrew became determined to become wealthier than Rockefeller an avenge his mentor with the railroad industry going through a tough time Andrew pivoted slightly when he noticed a new market he could take advantage of he was witnessing unemployed Americans flooding to Big City cities like Chicago and New York in search of work and once again Andrew saw the future using steel to build skyscrapers since big cities needed more buildings and offices and still would allow them to build much taller more secure structures so Andrew's Steel company began building tens of thousands of skyscrapers and very quickly the landscape of America completely changed thanks to Carnegie steel this of course meant Andrew's profits began to increase rapidly but although Andrew was making profits of over 1.5 million dollars a year his personal Fortune was still much smaller than Rockefellers he needed a way to become even more profitable and the good news was that he knew of a man who could help the bad news was this partnership would have devastating consequences [Music] thank you to help run his steel mills Andrew brought in a man named Henry Clay Frick another industrialist who had a reputation as a Cutthroat executive known for his ruthlessness Henry Frick had set a goal of becoming a millionaire by the time he was 30. and he'd succeeded in that in fact he was known for getting what he wanted by any means necessary whereas Andrew was actually quite thin-skinned and cared about what people thought of him Frick did not care at all he was merciless and Andrew believed our partnership with Frick would give his company The Edge it needed to completely dominate the steel industry while some questioned giving Frick so much power within his company immediately Frick started to prove his worth through fear and intimidation Frick renegotiated improved contracts with suppliers for Andrew's company Frick also used his toughness to cut costs further and eliminate waste but most importantly by putting freck as the face of the company it allowed Andrew to deflect any blame or criticism away from himself for example despite record-breaking profits they decided to cut work wages even further but Andrew made out like it was Frick's decision and it was Frick who delivered the news likewise Frick had a reputation for breaking up unions and stamping out any efforts for workers to band together and sure enough most of Carnegie still Mills had no unions so basically Frick acted as a barrier between Andrew and unpopular or controversial decisions he got fricked to do those kind of jobs like cutting salaries and extending working hours and thus as a combined team Andrew and Frick were a powerful force one example of their ruthlessness is what they did to a rival steel plant called Duquesne still works Duquesne had begun to beat Andrew at his own game using Innovative technology and systems to cut costs and Andrew was concerned by this competition and knew it was going to be hard to win in a fair fight so with the help of Frick and their combined contacts Andrew spread a rumor that Duquesne Mill was producing defective steel he circulated a note to various railroads warning them not to use steel from Duquesne works because it lacked what he called homogeneous deity no nobody knew what this term actually meant but it didn't sound good in fact it sounded scary enough that it frightened off many customers from buying steel from Duquesne as they were concerned about its quality now these rumors that Andrew spread were completely made up but he knew that if Duquesne sail slowed enough they'd become unprofitable and at that point Andrew temporarily undercut duquesne's pricing to Quicken their demise he was willing to make a loss on orders if it meant taking customers from Duquesne and driving them out of business within a year or so Duquesne was in financial ruin and Frick negotiated a deal for him and Andrew to buy Duquesne steelworks at a bargain price once they bought Duquesne still works they learn of the techniques they'd been using to drive down costs and they implemented the exact same process at their other Mills the same process that a few months earlier they'd been telling everyone not to trust this was just one example of Andrew and Frick doing whatever it took to win and spreading lies about a competitor was nowhere near the worst thing they did but we'll get to that for now frick was proven his worth profits nearly doubled in the first year of these two teaming up by ramping up production and slashing costs Andrew and Frick had the profits to buy out other competitors in the area and open more steel mills which only saw Andrew's personal Fortune Rise even higher by this point he would have been a billionaire in today's money however Andrew Carnegie's reputation with Henry Frick would result in several controversies that would forever tarnish Andrew's reputation but he worked so hard to cultivate the first disaster came when Frick purchased land in the hills of Pittsburgh and built a private members only club for the wealthiest men in the country it consisted of about 50 industrialists bankers and influential people and the most prominent Club member of all was Frick's partner Andrew Carnegie they called it the South Fork fishing and hunting club and since they wanted their own private Lake to fish on they took control of the South Fork Dam the largest dam of its kind holding 20 million tons of water just 14 miles down river was a working-class town called Johnstown consisting mainly of Steel Workers and their families unfortunately the club were much more concerned about adapting the dam to suit their own needs rather than worrying about making it safe thus they made changes like leveling off the top to make room for a road and also lowering the dam by several feet this completely went against the safety advice they were given in fact local officials begged Frick to strengthen the dam but the club didn't seem to care they wanted their fishing and hunting club to be perfect it won't surprise you to hear that in 1889 what a rainstorm came along the dam breached sending millions of gallons of water to the towns below 2 209 people were killed including 400 children bodies would be found for years to come as many bodies washed hundreds of miles away the Johnstown Flood was the worst man-made disaster in the United States at the time and the club used their money to ensure they weren't held accountable now it should be stressed that Andrew Carnegie was simply the most prominent member of this club there's no indication he himself was directly involved in anything to do with am but Andrew did help sweep the whole thing under the rug to protect Frick and just Andrew's close connection to Frick and his involvement with the club was enough to tarnish Andrew's reputation in the media there was understandably public outcry over the negligent actions of this ultra wealthy Club whose modifications to the dam had seemingly helped cause this tragedy and unfortunately for Andrew this was just the very beginning of the controversies he'd be involved with things were about to get much worse thank you unrest was brewing amongst Andrew's workers they were quite rightly feeling like wage slaves with no chance of progression within the company they were witnessing Andrew's Fortune grow rapidly whilst they struggled just to survive what was most infuriating is that in a public essay Andrew championed the right for workers to organize into unions and yet privately his company constantly tried to squash them Andrew publicly seemed to be saying all the right things to make himself look good and then in private he had Frick do the exact opposite and make life hell for his workers another example of this was how Andrew built a library near his first steel mill which he said was for his workers at the Edgar Thompson still works but the reality was his employees worked such long hours they wouldn't get a chance to use it not to mention that he employed many unskilled laborers who couldn't read anyway the library seemed more about his own self-preservation than actually caring for his workers if he truly wanted to help them he'd have given them the raises and safety measures they wanted not a library but Andrew loved being the good guy opening libraries with extravagant ceremonies and writing essays on workers rights whilst making Frick the face of the unpopular decisions and the scapegoat for his Dirty Work luckily Frick didn't seem to care much about his own image in fact perhaps relished in his ruthless hard-man reputation but since the Edgar Thompson steel mill was such a huge success Andrew had bought another steel mill Homestead and he invested heavily into this new still plant enabling it to produce vast quantities of Steel but at first labor costs had not been optimized as he put out many of the employees were part of a union called The Amalgamated Association of Iron and Steel Workers however their contract was up for Renewal soon and given the steel industry was doing well and the plants were so profitable this Union wanted to ask for a wage increase obviously Andrew had no intention of doing that what he did say was that he was considering building a library near Homestead still plans if they were good partners and what he really meant by that was he'd build it if the workers gave up their affiliation with trade unions the problem Andrew had was that he was trying to Rebrand His image from oppressive billion in air to Champion of workers rights so as negotiations approached with the union he put frickin charge to handle that Andrew told Frick he had his full support to do what was needed meanwhile Andrew decided to distance himself and Frick and the whole Union negotiations he was well aware of Frick's aggressiveness and how nasty this dispute could turn so in May 1892 Andrew took a long vacation to Scotland leaving Homestead fully in Frick's hands basically Andrew wanted to publicly distance himself from the situation and give himself plausible deniability if things escalated but privately Andrew's message to frick was clear do whatever it takes and thus Andrew Carnegie the man who had publicly championed workers rights and unions had ordered Frick to crush the Union at their plant before he left for his vacation in Scotland Andrew gave Frick one more instruction increased production levels at the homestead still planned even higher before the Union contract expired in the summer which would mean they had a stockpile of material if negotiations failed and the work workers went on strike and indeed Frick began to squeeze everything he could out of the workers work days grew even longer despite the fact having such exhausted employees working in a dangerous environment like a steel mill caused more injuries and fatalities it's estimated nine percent of all still workers industry-wide died on the job but the homestead workers were pushed harder than ever spending half their lives in Dreadful conditions for low wages witnessing their colleagues have accidents or die they were working longer hours for no pay increase and the workforce was United this could not continue with their current contract about to expire the union said they wanted a pay increase and Improvement in safety conditions unfortunately for them they were dealing with Henry Frick who immediately counted their proposals with a 22 wage decrease and said that they had to break up the union to continue working at the plans just imagine that for a moment you know how well the owners of the still plant are doing but they're now suggesting you work more hours for less money when you're already on very low pay to begin with but freaking Andrew believed that when faced with the ultimatum of no work at all the workers would give in but they were wrong the workers decided enough was enough and they refused Frick's demands the workers actually tried to contact Andrew since he was the main owner of the mill and publicly he'd been supporting unions and workers so surely Andrew wouldn't stand by and let Frick do this right but conveniently Andrew was unreachable from his vacation in Scotland at least he was unreachable to the workers and the Press but from his castle in the Scottish Highlands Andrew was still in communication with Henry Frick so he was aware of what was happening he wrote Frick multiple letters in which he said Mr Frick no doubt you will get Homestead right you can get anything right with your mild persistence we all approve of anything you do we are with you to the end so privately it was extremely clear whose side Andrew was on and with the Union not backing down on June 25th Frick announced he would no longer negotiate with the Union Union and only deal with workers individually the union actually said that they were willing to compromise on pretty much all of Frick's other demands but insisted they were allowed to keep their Union however Frick had no interest in compromises he wanted to win so on June 29th on orders from Andrew Frick closed down the steel mill and locked the workers out both Andrew and Frick believed within a couple of days the workers would buckle and agreed to disband their Union and then go back to work with no pay increase if the workers didn't back down Frick said he would replace the homestead workers with non-union immigrant workers who would take their jobs as Andrew and Frick figured the workers would rather keep their jobs than their Union and some money was surely better than no money of course shutting down the mill for a couple of days wasn't ideal but remember Andrew and Frick had already prepared for this as they'd stockpiled materials in advance by pushing workers harder than ever in the months prior what they hadn't prepared for was just how United the workers were they'd reached a Breaking Point as they'd given so much of them self to the mill that they deeply believed they were entitled to at least some of its success thus the workers went on strike and thousands of Homestead workers seized the Mel they barricaded themselves in front of the homestead steel Works preventing Frick bringing in any replacement workers to take their jobs as a result still production remained halted as the plant was surrounded by striking workers of course frick was not someone to back down easily Andrew Carnegie's words were still ringing in his mind when at all costs we are with you to the end and therefore Frick hired a private mercenary Army called the pinkertons to escort his new immigrant workers to the factory the pinkertons were basically Hired Guns the muscle to get the Striking workers to stop barricading themselves in front of the homestead steel mill on the 6th of July 1892 300 Pinkerton men arrived on barges from across the lake armed with guns of course Frick's decision to bring in what was essentially a private Army meant this quite literally was War but frick was confident this show of force would be enough to get the Striking workers to give in however as the Pinkerton Army arrived by boat workers stationed along the river spotted them and alerted the thousands of Strikers that they needed to go and grab any weapons they could from the town the workers rushed to find anything they could Stones knives clubs anything and as the pinkertons got to the shore one of the Striking workers urged them not to step off their barge they said the strikers had weapons of their own and this would turn ugly they pleaded with the pinkertons to Simply turn away but the pinkertons had their orders from Frick and the instruction was clear Take Back Control of Homestead now historians still aren't certain who fired the first shot but what we do know is that very soon the area surrounding Homestead stillmill was filled with the sound of stones bullets and cries the battle had begun the Striking workers rolled a flaming freight train car at the Pinkerton barges they also tossed dynamite in the river to sing the Pinkerton boats and pumped oil into the river and tried to set it on fire in response the pinkertons fired their guns and violent chaos broke out for 12 brutal hours the battle raged on during the fighting its estimated nine Homestead workers were killed seven Pinkerton army men were killed and countless people on both sides were injured so much blood was spilled and people on both sides lay dead and brutally beaten but when the fighting stopped it was the pinkertons who surrendered in truth when frickett hired them they'd not expected the workers would put up a fight like this and somehow the Striking workers had managed to hold their ground the workers thought they had won and Frick would now be forced to negotiate with them but they were wrong before we get to the next chapter it's time to answer a question I get a lot what music do I use in these videos and the answer is today's sponsor epidemic sound I've been using epidemic sound myself for years and that's because I really believe music is one of the most overlooked parts of making videos when you have the right soundtrack it can make the video so much more engaging but the problem if you use Music normally is you can't monetize and you meet a copyright strike and that's why epidemic sound is the perfect solution they have a huge library of over 35 000 songs and 90 000 sound effects that you can use while still fully monetizing your video everything's categorized by mood and genre so you can easily find the perfect tracks you need honestly I love their service and I think every Creator would benefit from Anna and if you use my link in the description you'll get a free 30-day trial to test it yourself and any videos you post using their music will stay monetized even if you cancel it's seriously a great deal so click the link below now to get started for free hearing of the violence at Homestead the Pennsylvania government sent in the state militia to restore order eight thousand troops came to intervene and resolve the situation however their resolution was to reclaim the mill for Carnegie steel this time the workers were massively outnumbered and they were forced to leave this meant that frick was able to reopen the steel works and bring in his cheaper replacement workers unless many of the original Homestead workers were out of a job in fact as a result of this some of them would not have just lost their jobs but their homes everything and of course several had literally lost their lives some of the original Homestead workers were able to stay on still but with lower pay longer hours and the same lack of safety they also had to agree to Ironclad contracts that made workers give up their rights to be part of a union the result of the Homestead Strike would mean that there would be no still workers union for another 45 years it was one of the pivotal moments in American labor history and a huge victory for Andrew Carnegie and Henry Frick how however was from an economic perspective Andrew had got exactly what he wanted his carefully cultivated image was in shambles the public were outraged over the violence that had taken place at Homestead Andrew extended his stay in Scotland hoping the backlash and controversy would blow over eventually but in reality it would leave a permanent stain on his reputation he was dubbed the arch sneak of this age whilst another quote from the time said see what you will a Frick but at least he was a brave man say what you will of Carnegie he was a coward after all it seemed like Andrew hid away and sent others to do his business but this does raise the question how much blame can Andrew actually take for the homestead tragedy now in his autobiography he didn't feel he deserved any blame he still maintained he had no idea what would happen and took no responsibility he wrote that nothing in all my life before or since wounded me so deeply and it seemed like he saw himself as a victim just as much as the workers he said had I been there the tragedy would not have occurred he was insistent he was unavailable and had had no idea about the events of Homestead until it was too late and in defense of Andrew it's true that he was in Scotland during all of this if he'd been there it's definitely possible things would have been different it was Frick who ultimately hired the pinkertons and I don't think Andrew or Frick actually believed any fighting would take place they thought the workers would give in once the armed pinkertons arrived it's not like Andrew intended this or could know exactly what would happen and I certainly don't think Andrew ever wanted or thought any blood would be shared but unfortunately the aim is calculated and Andrew as the main owner of the plant surely has to take some responsibility because multiple documents and letters clearly show Andrew was well aware of Frick's plan to put down the union and he repeatedly gave Frick approval and assurances to do whatever was necessary for example one of Andrew's letters in the middle of the tensions specifically said never employ one of these rioters must not fail now and of course it was Andrew who put freaking charge of it all despite knowing that Frick had used pinkertons in the past Andrew was well aware of Frick's brutal methods and what his intentions would be Andrew also knew how tense the situation was and how easily it could escalate and yet he kept sending letters encouraging Frank Andrew could have stopped the whole thing long before it ever got to a point where people were killed and so whilst it would be unfair to fully blame Andrew for the events of Homestead his suggestion that it was completely out of his hands also doesn't seem true either and it can't be denied Andrew benefited from the whole incident he dealt a massive blow to the unions and cut his costs further this allowed him to reinvest in more expansion and let's build his own railroads to transport goods from the Plants Plus public support for the homestead workers began to fall After People heard stories of the violence and the way they had beaten Pinkerton men support then dropped even further when an anarchist tried to assassinate Henry Frick in Revenge for his Savage treatment of workers during the Homestead Strike this Anarchist wasn't even connected to the homestead Strikers though and his assassination attempt failed as he tried to shoot Frick in the head but instead hit his shoulder as the gunman was dragged Away by guards Frick said I do not think I will die but whether I do or not the company will pursue the same policy and it will win Frick didn't die in fact in true Frick style he was back to work as normal that same week but all of this did seem to change public sentiments slightly especially as many people could see that Carnegie's low-cost steel did have great benefits for the whole country unless without a union and with dwindling public support the workers had no bargaining power and wages remained low the workers did try to reorganize several times but Andrew and Frick implemented an elaborate system of corporate spies in their steel mills basically meaning they had men working for them who kept managers up to date on any employees who were potentially trying to organize anything or band together as a result they could stop any Union efforts before they ever developed as a result of these spies people were scared to say much to each other and any sense of community had been destroyed a common phrase at the time was if you want to talk at Homestead you must talk to yourself given that Andrew's own father actively campaigned for better working conditions when he was alive it does make even stranger that Andrew was so willing to crush unionizing efforts but honestly all throughout his life Andrew seemed did a conflict with himself on one hand genuinely believing workers deserved more but also knowing that in order for him to win in business he had to drive down costs and be more efficient than his competitors Andrew was clearly Keen to just try and move on from the hole into them though in a letter to a friend he wrote Oh that Homestead blunder it's fading as all events do and we are back at work selling steel for one pound for a half penny a few years later Andrew did return to Homestead though to open a large building with a library Concert Hall swimming pool and gym when opening it he said by this meeting all the regretful thoughts all the unpleasant Memories Are Forever In The Deep bosom of the ocean buried henceforth we are to think of Homestead as we see it today the building was magnificent but the notion that it made up for all the damage caused was laughable and was more like Andrew was trying to convince himself than anyone else Andrew also began telling newspaper reporters that if he'd been around during the Homestead strike none of this would have happened he said he had respect for his workers amid never been any Bloodshed on his watch the implication was clear frick was to blame for what happened understandably frick was outraged when he realized that Andrew was trying to lay all the blame on him he snapped at Andrew saying he was sick of his hypocritical articles and absurd interviews why was he not manly enough to say to my face what he said behind my back for cast I have stood a great many insults from Mr Carnegie in the past but I will submit to no further insults in the future from there the relationship between these two men only deteriorated further there were several incidents where the men clashed over the handling of situations within the business and It ultimately led to Frick resigning as chief executive this only caused more issues though as there was then a dispute over how much Frick should be paid for his shares frickville Andrew was trying to rip him off by using a Share value far below the real market rate in their final meeting together he told Andrew for years I've been convinced that there is not an honest bone in your body now I know that you are a goddamn Thief Frick ended up suing for the market value of the shares in the company and frix lawsuit was one of the most high-profile private lawsuits in American corporate history this court battle got lots of attention in National newspapers after all it was a great story two Titans of Industry who had once been Partners now going at each other a Revenge tale filled with betrayal and deceit the lawsuit also meant Financial details of the company were revealed as until then no one had any idea how profitable Carnegie steel had become turns out it was on track to make around 40 million dollars in 1900 equivalent of around 1.4 billion in today's money Andrew and freck had deliberately kept these numbers secret because they knew it would spark criticism from union leaders and politicians and so in order to avoid more private details being revealed in court a settlement was reached with Frick where he got bought out for 31.6 million and in return He gave up any management role in the company and withdrew his lawsuits from then on the two men kept apart and never met up again but for tricks him to enjoy taunting Andrew from afar for example he would send Andrew messages mocking him for any bad business decisions he made Frick told him your management of the company has already become the subject of jest in later years Frick even commissioned a building right next to one of Andrew's buildings Frick insisted his building be taller than Andrews though so the Andrews building was quite literally in its shadow the two men who had once dominated the steel industry together had ended their partnership on extremely bitter terms both men feeling that the other one had betrayed them oh despite the controversy Andrew stillmelt continued to thrive in fact by the turn of the 20th century Andrew's company produced more steel than the entire country of Great Britain however as Andrew is now approaching his 70s he wanted more Leisure Time with his family Andrew's wife was desperate for him to sell his business so they could spend the last part of their lives together without Andrew being constantly immersed in work and thus after so many years of building his still Empire Andrew was now open to the idea of selling it the issue was that it was so valuable there weren't many people who could afford to buy air there was one man who showed a keen interest though an extremely wealthy financier named John Pierpont Morgan remember how we said earlier that the railroad industry had gotten into a bit of a mess well JP Morgan had used that to his Advantage buying up underpriced railroads and merging them together to create hugely dominant companies thus building a fortune in the railroad industry and after Conquering the rail business JP Morgan had turned his attention to one of the country's most other profitable Industries steel the problem was his plants weren't as efficient or low cost as Andrew Carnegie's and JP Morgan knew if he wanted to dominate the steal business his best Hope was buying Andrew Carnegie's company rather than trying to compete with him a deal was actually brokered by another recognizable name Charles Schwab who at the time was president of Carnegie Steele as he was the one who had replaced Henry Frick and thus Charles Schwab was the middleman connecting these two magnates together Charles first approached JP Morgan to find out if he was interested which he was and then Charles suggested the idea to Andrew but it's reported Andrew's wife gave Charles Schwab a piece of advice she said ask my husband about selling his company when you're on the golf course as that's when he's most relaxed in a good mood oh and let him win sure enough it worked and Andrew agreed to the idea of selling his steel Empire to JP Morgan if they could agree on a price of course so in 1901 JP Morgan told Andrew Carnegie to write down the number he wanted for his business on a piece of paper Andrew wrote 480 million dollars with inflation that price works out around 17 billion dollars today but it's reported that JP Morgan Millie glanced at the paper and without any hesitation agreed on the spot to the deal when the two men shook hands after signing Andrew said to him I wonder if I could have asked you for a hundred million dollars more to which JP Morgan answered if you had you would have got it but still it was the largest business transaction in American history and once the deal was complete JP Morgan then combined Carnegie Steel company with several other steel companies and created USD all the world's first ever billion dollar Corporation meanwhile the sale of his steel business made Andrew Carnegie the richest man in the world the boy went into poverty in Scotland with seemingly no hopes and no connections had risen to the highest Financial level imaginable he'd made obscene wealth but at what cost and what was he gonna do with all that money foreign hey guys before we get to the next part of the story I just want to say that if you find these videos interesting please consider turning on notifications for magnates media I'm working on some even bigger projects right now so if you want to make sure you see them when they're ready just hit the notification Bell now also I just want to say a massive thank you for watching this channel these videos do take a long while to make so honestly I really appreciate all your comments and supports So yeah thank you for everything and now let's get back to the story thank you Andrew wanted to be remembered for the good he'd done and began giving money away at a rate which perhaps nobody else ever had after selling his still Empire to JP Morgan he separated himself from the world of business and his full-time job became giving away his vast amount of wealth however Andrew didn't like charity he felt just giving people money directly wouldn't actually improve their position in life which is why his biggest Focus was on education he'd only had five years of schooling himself but he said that education was the main driver of his financial success thus he used his money to set up over 2 500 libraries across many different parts of the world he also set up and funded museums schools and universities for example even today there's Carnegie Mellon University named after him and to be fair it wasn't all self-promotion for example only about 500 of the libraries he set up had his name on the rest weren't named after him he just gave them grants and funding likewise Carnegie Hall is one of New York's most recognized landmarks but in 1891 when Andrew donated the building it was simply known as The Music Hall and they only decided to name it after Carnegie after he died so it wasn't his request for the building to be named after him in other words to dismiss Andrew's generosity as purely about self-preservation or ego I think is unfair he genuinely did want to make an impact and help people he also didn't believe in passing on wealth down the generations as he felt inherited fortunes were squandered and that The Heirs used the money self-indulgently and irresponsibly and so whilst he made sure his family would be comfortable he didn't leave them with much money instead he stated the parent who leaves his son enormous wealth generally deadens the talents and energies of the Sun instead Andrew ensured almost all of his money was given away by the time of his death he'd already given over 350 million dollars and when he couldn't give the money away fast enough he created the Carnegie Corporation to give away the remainder of his wealth for him after he was gone and ensured it went to worthy causes still to this day the Carnegie Corporation continues to do philanthropic work in his name in his very final years Andrew then devoted his energy to trying to keep World Peace seriously at one point he essentially tried to bribe the Germans to stop World War one and he tried to get world leaders to work together and avoid war of any kind so considering all of the good he did in his later life how should we feel about Andrew Carnegie many choose to view his donations more cynically for example You could argue Andrew's philanthropy was because of a guilty conscience from his involvement in the club that caused the Johnstown Flood to the tragedy of Homestead to the poor working conditions to the abusive treatment of his workers and the endless injuries and deaths at his plants it's possible he saw philanthropy as atonement his way of trying to put things right others believe his philanthropy was more about self-preservation ensuring his name would live on and be remembered fondly via foundations Charities and buildings he set up essentially that he was more concerned about leaving behind a positive Legacy and others even think that his rivalry with Rockefeller played a part they were so competitive that as they got older they seemed to be competing who could give away more of their money and be the bigger philanthropist however whilst all of these things may be a factor it does seem Andrew genuinely did want to help people he often repeated the line that the man who dies Rich dies disgraced in fact in his article called The Gospel of wealths he described how he felt the wealthy had an obligation to use their Fortune to improve society as a whole the article was very influential and Andrew is often credited with having established the precedent of corporate philanthropy inspiring future billionaires to think more about giving their money away too and so it's only fair to stress that Andrew did do a lot for Humanity firstly by significantly improving the supply and efficiency of Steel and helping to build so much and then by giving away more money than any of us could ever dream of his vast donations towards education have no doubt helped countless people and had a very positive impact on the world does that make up for everything he did opinions will vary on that but in his own way it's possible he felt the treatment of his workers was necessary in order to build a fortune which he could then give away that the end justifies the means and if he hadn't done that would an even more ruthless businessman have just done the same but then kept all the money for themselves one thing is for sure though as with so many of these business stories it's never black or white and people aren't simply good or bad there's always so much more Nuance to it but what I will say is it's rare to find someone quite like Carnegie who simultaneously did so much good whilst also causing so much damage and so I genuinely be curious to hear your overall thoughts on Carnegie in the comments but first Andrew had one final thing to do before he died oh in his final years knowing that his time on this Earth was nearly up Andrew Carnegie still had one final piece of business to attend to he sent a messenger boy to deliver a message to his old business partner Henry Frick the two men had not seen each other in many years since the lawsuits in his note Andrew reasoned that since both he and Frick were growing old wouldn't it make sense to put past grievances behind them and patch things up surely it was time they made amends a met up in person Frick read Andrew's letter and told the messenger yes you can tell Carnegie I'll meet him he then threw the letter away in disgust and said tell Carnegie I'll meet him in hell since that's where we're both going okay now that you know Carnegie's story it's time for the sequel let's find out how JP Morgan built his Empire and what he did after purchasing Carnegie still company just click the thumbnail on screen and I'll see you there in a second

Channel: MagnatesMedia

Views: 322,851

Keywords: Andrew Carnegie documentary, Andrew Carnegie, Carnegie, andrew carnegie, magnate, magnates, magnatesmedia, MagnatesMedia, Magnatemedia, magnetmedia, magnet media, magnetsmedia, MAGNATES, MAGNATES MEDIA, Magnetsmedia, magnate media, magnates media, MAGNATESMEDIA, Magnetamedia, business magnate, business magnates, carnegie documentary, jp morgan, business stories, business documentary, business documentaries, documentary about andrew carnegie, rags to riches, rags to riches story, homestead

Id: 8aIyHl5qP9I

Length: 53min 31sec (3211 seconds)

Published: Sat Apr 29 2023